View Full Version : Tenant wants to form a limited company from rented address
06-12-2011, 08:16 AM
My tenant has just informed me that he wishes to form a limited company and use the rented address as the company address. I understand from the teneancy agreement that he cannot do this (the property is to be used for domestic purposes only) but I wondered what the implications might be if he did.
The risk is that if he goes ahead and you do not object, then you may be authorising a business tenancy which could have security of tenure.
You could either remind him that businesses cannot be run from your property or suggest that if wants to continue (and you do not object per se but wish to consider your options, that he agrees to pay all your legal consulting costs and the fee to draw up a suitable tenancy for both your needs.
06-12-2011, 13:15 PM
The risk is that if he goes ahead and you do not object, then you may be authorising a business tenancy which could have security of tenure.You WILL be drafting a business tenancy i.e. one at common law and if you are unfamiliar with its workings then you are in trouble if you grant one. You would need to serve a Notice whereby the tenants do not have security of tenure exempting it out of the 1954 L & T Act, but as the premises is already occupied as an AST you need to take specialist legal advice as to whether this is a good idea.
06-12-2011, 14:23 PM
Don't want to worry you but you can do little to stop him (apart from getting rid of course and even then you have to persuade him to remove the company). I had someone register a ltd company from a property I own (it is commercial so none of your problems but this info may be of use). The person had no direct connection with my property (he did some work with someone who was there) and I did not wish him to have any connection with me. He was "known to" the Police. I tried everything via companies house. The police even spoke to them. I was told you cannot make someone deregister - the person who registered it has to do so. It is not easy! Best to try to stop it happening in the first place I suppose but if tenant decides to go ahead you will not be able to do much!
06-12-2011, 18:25 PM
Contact Companies House and advise your address has been used fraudulently for opening up a company.
Without an oficial adress the company will be shut down.
If you wish to give permission to tenant for business purposes you need to ask a the council what would be the hypothetical situation on council tax if the tenant operated a business.
Also there may be HMRC problems regarding the status of your property.
Be very, very careful.
Carry out full due diligence before you give permission.
Suggest he uses his parent's address.
06-12-2011, 20:08 PM
companies house won't want to know in my opinion.....
07-12-2011, 08:00 AM
Thank you for all the advice. I'm going down the "no" route and if they have to go, they have to go.
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